(Reuters) – Panasonic Energy Co, a major Tesla Inc supplier, said on Wednesday it had selected Kansas as the site for a new battery plant that state officials said would create up to 4,000 jobs and represent an investment of up to $4 billion.
The plant, to be built in De Soto, Kansas, is central to Panasonic’s effort to ramp up production for electric vehicles as it pushes for gains in battery power and performance.
The Japanese company already has a factory in Nevada that supplies Tesla.
Panasonic Energy, a Panasonic Holdings Corp unit, selected Kansas over Oklahoma for the plant after Kansas Gov. Laura Kelly pushed the state legislature to approve an incentive package of up to $1 billion earlier this year.
In a statement, the Kansas Department of Commerce said the state would reimburse Panasonic with estimated subsidies of $829 million after the company has completed its investment and hiring.
Kansas estimated $2.5 billion in annual economic activity from the plant that would offset the state’s largest development subsidy package.
By 2029, Panasonic plans to expand battery production capacity by three to four times, with most of the increase in North America.
Panasonic is working to supply Tesla with a more powerful, larger battery known as the 4680 model, starting with production in Japan.
In a statement, the Oklahoma Department of Commerce said it was “optimistic for additional opportunities” to win investment from Panasonic in the future.
“With the increased electrification of the automotive market, expanding battery production in the United States is critical to help meet demand,” Panasonic Energy President Kazuo Tadanobu said in a statement.
Other battery makers have also announced plans to invest in U.S. manufacturing or begun negotiations with state officials in recent months, part of an industry trend to meet expected growth for EVs and reduce reliance on production in China and related supply chain risks.
South Korean battery makers have announced investment plans of $5.5 billion this year in U.S. plants.
China’s Contemporary Amperex Technology Co Ltd (CATL), the top global battery supplier, has also been vetting sites for U.S. production, people with knowledge of those discussions have said.
(Reporting by Tiyashi Datta in Bengaluru and Hyunjoo Jin; Writing by Kevin Krolicki; Editing by Anil D’Silva, Marguerita Choy and Richard Chang)
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